I can't help but think that this is just going to accelerate efforts to automate fast food workers. Then once the technology works well enough to replace expensive labor in California, there'll be very little stopping it from spreading everywhere else, regardless of the minimum wage in other places.
I did a search, and 9% of Californias workforce are undocumented. So you're just likely to see a shift away from the de jure workforce to the de facto workforce, since the costs are lower.
Warehouse workers get paid around the same rates in California yet you don't see automated warehouses. You see things like some goods to person robots and automated sortation and with the big retailers like Amazon, they still throw labor at the issue.
Industry has been trying to push automation with app based ordering(eg: starbucks) even before this change.
It was common for in the past for high schoolers to work manual labor. I worked on a farm during the summer in my youth for example. Teenage labor participation is at record lows.
Haven’t automated CEOs away yet, so I’m sure these folks are safe for now. CEOs are much more expensive and provide much less value arguably. No CEO has ever served me a meal, for example.
That's not how wages work. Hourly wages aren't based on actual economic value; they're based on a complex of factors that make someone accept or leave a job (convenience, opportunity cost, bargaining power, prior experience, etc.).
Fast food restaurants clearly realize more than $20/hr in economic value from their hourly employees in California, much like they do in Europe.
> Fast food restaurants clearly realize more than $20/hr in economic value from their hourly employees in California, much like they do in Europe.
This is certainly true on the whole, but it is not necessarily true at the margin. It's quite likely that in response, fast food restaurants will be motivated to slim down their staffing more than they would otherwise.
Keeping the store open might well be worth $30/hour per remaining employee, but the new equilibrium might involve things like closing drive thrus, moving to digital-only checkout, very high productivity expectations, etc.
Of course there are multiple dimensions to the employees decision of how much they are willing to trade their time for, but they are always boiled down to a singular financial value. This value is what they are paid.
I reject your assertion that an employee clearly realizes more than $20/hr in value to their employer. But even if they did: why should the employer be forced to pay them more, when the job itself is unskilled and therefore has a surplus of folks demanding the position, even at their current rates of pay?
> I reject your assertion that an employee clearly realizes more than $20/hr in value to their employer.
It's visible in the business practices: California has more McDonald's restaurants than any other state[1], and franchisees aren't running a charity. This law is the result of a compromise, as much as individual franchise owners may wish to portray otherwise[2]. If they're currently profitable and feel as though they can compromise at $20/hr, then I feel confident in claiming that they're realizing more than $20/hr in average employee labor value.
> But even if they did: why should the employer be forced to pay them more, when the job itself is unskilled and therefore has a surplus of folks demanding the position, even at their current rates of pay?
One good reason is to close an implicit subsidy: in states with high living costs, employees who require social services while continuing to work amount to an implicit labor subsidy on the government's part. I don't know about you, but I don't think the government should artificially depress wages like that.
> I don't know about you, but I don't think the government should artificially depress wages like that.
I agree. I don't think the government should provide any welfare services. Just as I don't think they should artificially skew market equilibrium through minimum wage or rent controls.
I don't agree with that. This isn't a place where I find mathematical balance interesting; minimum wages exist to protect those who would otherwise be forced into indigence by the power asymmetry in their bargaining abilities. Similarly, we provide a safety net to minimize indigence that would otherwise have significant external negative costs. Cruelty is only cheap at the margin; the state provides a valuable service by making it illegal to externalize cruelty's costs.
> Cruelty is only cheap at the margin; the state provides a valuable service by making it illegal to externalize cruelty's costs.
We have opposing views, and that's okay.
I believe that private charity should be the mechanism utilized to reduce the external costs of cruelty. It generates the most efficient solutions, and allows each person to maximize the utility of their givings.
I believe the government mandated solution is inefficient and often robs people of their charitable purchasing power.
This feels obviously untrue to me, I'd love to hear your argument for why you think it's true.
I have no economic reason to donate, the most efficient solution for me personally is to give $0 to charity.
If we decide, as a country, that it's important for our brothers and sisters to not starve to death, it seems to me that the most efficient system is one that's centralized, evidence-based, and supported by mandatory contributions.
>> I have no economic reason to donate, the most efficient solution for me personally is to give $0 to charity.
So we agree that you were able to increase the efficiency of your capital expenditure by not giving to charity. That is an increase in the efficiency of capital allocation over the taxation approach.
> If we decide, as a country, that it's important for our brothers and sisters to not starve to death, it seems to me that the most efficient system is one that's centralized, evidence-based, and supported by mandatory contributions.
Now you're contradicting the $0 charitable allocation. If you want to prevent starvation, then your optimal charitable contributions would be nonzero.
All society does in your example is force everyone to give to a cause that not everyone may want to give to. You're able to lower your contribution to the cause by forcing your neighbor to give to it under threat of violence. This is the problem I have with welfare, and this situation is known as "tyranny of the majority," which is what the republic US system sought to avoid.
Perhaps they lean on their network of friends and family to help them out? If that fails, perhaps they seek out charity from a local perish or organization or ngo?
This is a solved problem, but the outsourcing of our troubles in a "fire and forget" way such as through taxes has both diminished the private sector's ability to provide as well as turned it into someone else's problem: "Well I pay my taxes so it's the governments responsibility now."
It's fascinating to read your descriptions of economic realities then describe taxes as a way to get through these problems but only if you can have additional profit seeking and added layers of bureaucracy.
"Legal Minimum Wage positively increases the productivity of the nation’s industry, by ensuring that the surplus of unemployed workmen shall be exclusively the least efficient workmen; or, to put it in another way, by ensuring that all the situations shall be filled by the most efficient operatives who are available...
What would be the result of a Legal Minimum Wage on the employer’s persistent desire to use boy labor, girl labor, married women’s labor, the labor of old men, of the feeble-minded, of the decrepit and broken-down invalids and all the other alternatives to the engagement of competent male adult workers at a full Standard Rate? … To put it shortly, all such labor is parasitic on other classes of the community, and is at present employed in this way only because it is parasitic...
The unemployable, to put it bluntly, do not and cannot under any circumstances earn their keep. What we have to do with them is to see that as few as possible of them are produced."
- Sidney Webb, “The Economic Theory of the Minimum Wage”
Aside from that not being how labor economics work: no, it reduces the business model of profiting off public and NPO social assistance programs that enable corporations to employ people at starvation wages.
If a business model relies upon paying people wages so low they can't afford to live without government assistance, then that business model is government subsidized.
The best example of this would be Walmart, who rake in massive profits year after year while having employees whose sole duty is to help employees with finding and filing for public assistance programs, which the employees need because they're paid so little.
No person in the US working a full-time job should be paid so little that they cannot afford at a minimum the essentials for living a healthy and happy life (ie, not just food/shelter but for things like enough to be able to do something in celebration of life's events, raise a child if they wish, put money away for when they are at retirement, etc.)
Among other things, this would substantially free up money and administration resources to provide for those who are not working and need help getting their life back together enough to be employable again.
Those employees need to survive long enough to find better employment. While I agree with the moral hazard, we’d have to allow lynching of corporate officials by those same poor as a means to counter power imbalance on the corporate side.
It seems unreasonable to demand that person A gets to murder person B unless person B gives person A their property while simultaneously saying person B isn't allowed to murder person A for theirs.
We have private charity to help fill the gap between a skills/resource deficiency and a paying job.
The length of the great depression was a direct cause of failed government intervention, first by Hoover then by FDR. This article does a great job explaining why:
Here's a quote related to the affect of FDR's imposed federal minimum wage; the consequences are similar to what I've argued above:
"""
The President’s Re-employment Agreement called for a minimum wage of 400 an hour ($12 to $15 a week in smaller communities), a 35-hour work week for industrial workers and 40 hours for white collar workers, and a ban on all youth labor.
This was a naive attempt at "increasing purchasing power" by increasing payrolls. But, the immense increase in business costs through shorter hours and higher wage rates worked naturally as an anti revival measure. After passage of the Act, unemployment rose to nearly 13 million. The South, especially, suffered severely from the minimum wage provisions: the Act forced 500,000 Blacks out of work.
"""
Here is a paper that argues New Deal spending crowded out 30% of faith-based benevolent charity:
Basic economics can be reduced to:
Operate while marginal_revenue >= marginal_cost (mr >= mc).
In this example, marginal cost just increased by some delta, d, to get to $20. This means that anyone currently working in such fashion that d > (mr - mc) now provides negative value to their employer.
Furthermore, in any future venture, people will only be hired if they can provide >= $20 in hourly revenue.
Likely fast food restaurants will raise prices to cover the increased mc, so this ultimately gets passed on to the consumer.
Because you’re not changing the service you’re providing and a “worse” worker doesn’t decrease the throughput of the store in any measurable fashion.
This increase will get passed onto the consumer, and it will also create more competition in who can maintain the constraint of $20/hr for pay while decreasing the rest of their costs to compete with the McDonald’s and KFCs.
> Because you’re not changing the service you’re providing and a “worse” worker doesn’t decrease the throughput of the store in any measurable fashion.
I dont think either assertion is true.
Maybe a business finds ways to cut costs to offset the wage increases leading to a worse product for the consumer.
If I have a worker that is able to produce 150% of the tacos per hour compared to another worker, there is definitely a difference in throughput and therefore a difference in value.
> This increase will get passed onto the consumer... reducing the profit margin
I agree. There are three outcomes:
1. Pass the costs to the consumer
2. Reduce profit margins
3. Go out of business (this happens when 1 and 2 fail)
The policy now has forcably changed the market equilibrium for labor by reducing supply in jobs comparable to fast food. The government has now mandated the consumer must pay more than the market equilibrium price. It has mandated that entrepreneurs reduce their income.
Command economies were literally one of the golden ages of the American middle class. So no they do actually work.
Anyone who is working deserves a living wage. Otherwise we’re now helping companies hire people and not pay them enough for the work they do. These people don’t go away, they end up costing all tax payers more $.
Also, next time you go to a fast food place look and see how many of them are high schoolers. Maybe that’ll stop the strawman arguments.
> Also, next time you go to a fast food place look and see how many of them are high schoolers. Maybe that’ll stop the strawman arguments.
Have you considered that by increasing minimum wage so dramatically, high schoolers now need to compete with adults for the same positions, and they are now crowded out because they have less flexibility with their hours and schedules?
High schoolers may be willing to accept a lower wage for the same work, which would give them an advantage in hiring, but now they are barred from seeking it.
> High schoolers may be willing to accept a lower wage for the same work, which would give them an advantage in hiring, but now they are barred from seeking it.
The point of a government is to protect people from being exploited.
It is not exploitation if it's voluntary. The business cannot enslave the teenager. They can simply offer a wage and hope someone bites. If nobody bites, they either need to increase the offer or go without the labor.
It is fine. I believe the Wagner Act, which prohibited child labor federally, is unconstitutional.
Everywhere child labor is a symptom of the poor. But I believe parents should have the ability to teach and labor their children as they see fit. Regulations against unsafe working conditions are fine, so long as they're implemented at the correct level, but the government deciding it knows better than the parent is always wrong.
Its controversial because if the market could bear a price increase, it would already bear it. The left hand side of your inequality is already at a local maximum, and can not be raised to pass on costs to the consumer.
If that is the case, that means that prices are fixed so either profits will decrease, service will diminish to cut costs to counteract the rising cost of labor, or both.
Companies whose costs can't be cut to cover the rising labor and profits shrink to zero will go out of business.
Why are we mandating that people go out of business when they have people voluntarily trading their labor for a set price?
Why are we reducing the roi of producers of capital which will lead to fewer investments?
Is this a play to reduce fast food for the sake of public wellbeing?
Is there a 5A argument here that the government has passed a law for the public benefit and that law invalidated labor contracts, so now the government owes just compensation for the delta between what their labor cost them prior to the new minimum wage? I would say yes.
Maybe you measure how many burgers they can make in an hour. Each burger sells for $x dollars. You've now quantified how much revenue that employee generates.
But it is. Because at some point I will have my labor at maximum capacity.
And in all cases they need to produce enough over the duration of their shift to offset the cost of hiring them. Why would I employee two people to work at 50% capacity when I could just hire one?
Why hire someone for two hours when I could hire someone else for one.
Yes, there are some positions wherein I need someone there whether they're doing work or sitting around. But a business that can minimize costs can win customers so there will always be the need to measure widget output to justify the hire.
That's just blackmail, like saying you have to legalize prostitution to reduce rape. No. You have to stop exploiting people or be eternally afraid of them, and eternally unable to look in the mirror. That's what needs doing.
It doesn't appear that Flippy has taken off. I spent a bit of time in a fast food kitchen around 20 years ago and it was already pretty automated, but it seems like human hands are quite hard to beat.
My local McDonald's just renovated with what I assume is their newest layout concept. The front counter has exactly two registers/terminals, of which even at a busy time (school out, so tons of teenagers packed into the place), only one was staffed. Very small ordering counter. On the other side of the area is a much larger pick up area with order status screens.
There's only two electronic menu boards down from the previous four. Yet six total self-order kiosks (three double-sided), but the real expectation is people will just place the order with the phone via mobile ordering. After all, that's what most of the teenagers order did, in order to get their $0.50 Double Cheeseburger (with no additional purchase).
Moreover, you can't see into the kitchen anymore at all. It was a solid wood-decorated wall behind the counter, clearly a "hallway" or partition behind that, of which behind that is likely the actual kitchen. They increased the space of the dining area somewhat as a result.
I haven't been to McDonald's (in the US at least) in like 20 years. Double cheeseburgers are only $0.50?? After inflation that feels like it costs 25% of what I used to pay.
I much prefer a kiosk or ordering on my phone… and I also rarely do a drive thru order. There is less chance of a mistake when I enter the order myself.
Per other articles, the restaurant basically employs nearly as many employees as any normal store. The automation is for order taking and delivery (conveyor belt), not cooking.
Basically it eliminates the human interaction component for customers, but humans are still doing all the cooking, assembly, and packaging.
Think similar to a 1920s automat, but with mobile ordering and drive thru.
That's what I thought I recalled. Like, am I the only one who'd disappointed with the lack of real advancement in automation in this space in my lifetime? I do think the online/kiosk ordering systems are nice, but it doesn't seem like it moves the needle all that much.
Also, for what fast food costs these days, I can go to a local sit-down restaurant with a friend, briefly talk with a waiter, and talk to the checkout lady for a minute because we're regulars there and have a very pleasant lunch. I don't exactly long for human interaction at McD's but if we're going to go full automated dystopia (or just pretend that we have by removing all human interaction from the process), then I think it could be a lot cheaper.
If McDonalds is any indication, they’re more interested in stuffing anti patterns and pop-up deals into the kiosk UI to make them meaningful replacements for cashiers
I think McDonald's already saw the writing on the wall in terms of lowering their labor cost. Where I live here in the South-eastern U.S, most McDonald's have moved to Kiosks or ordering via App. They started with 2 Kiosks shortly after the post-2020 labor shortage. Then they added 4 more kiosks to handle the morning and lunch time rush.
Australia is so much further along with this. There are no humans taking orders at McDonalds and there haven't been for many years now. Most stores will have about 10 self serve kiosks.
McDonalds doesn't automate away a whole position at once, just a bit here and there and soon enough you might be able to handle a rush with one less person, or handle off peak with one less person, or if you can't drop one person, one person has more time to make sure the store is clean and supplies are well stocked etc.
The push to self-ordering via kiosk and mobile ordering isn't likely to be 100%, but the registers might be empty at times. The automated soda dispensers don't do all the work, but they reduce labor here and there. The thing to put ketchup and mustard on at the same time saves a step.
Why would you bother, when the demand for hamburgers that cost 2x as much is going to evaporate sooner than the robots get invented?
Anyway, the restaurant & food business is complicated. Can or will McDonald's serve hard alcohol in a drive-thru? Will immigrant (illegal) labor even afford transportation to cities? If the answer is yes to both questions, then a $20 minimum wage won't matter.
Of course it will. And don’t think the politicians don’t already know this. It’s all part of the plan. Next on the ballot is universal basic income for all who lost their jobs. Voters for life.
automation is expensive and hard to do at scale, and also prone to problems. It also does not replace humans. Self-checkout kiosks have been around for 15+ years but have not replaced cashiers. Many fast food places have self-ordering kiosks but this has not made employees obsolete.
The reality and likely future lies in the middle. Kiosks reduce cashiers per shift rather than replacing them completely. Many retailers only staff a single cashiered lane with many self checkouts, for example.
Yep, $20/hr plus benefits means for a 168 hour per week worker, you (as an business owner) need to possibly pay as much as $285K per year to cover a single worker 24 hours per day - even if a robot cost a $1,000,000 it would pay for itself in less than 4 years...Elon Musk (and other robot manufacturers) thanks you for this law.
Why fast food workers specifically? I suppose their jobs is worse than a desk job, or even a retail job, but there are arguably far worse jobs out there (eg. delivery workers, landscapers, or agricultural workers). The article's explanation of "most of the often overlooked workforce are the primary earners for their low-income households" isn't really convincing. Delivery drivers or agricultural workers are probably even easier to overlook than someone you have face to face interaction with, and I don't see any reason why primary earners would prefer fast food jobs over other jobs.
> It also settles — for now, at least — a fight between labor and business groups over how to regulate the industry. In exchange for higher pay, labor unions have dropped their attempt to make fast food corporations liable for the misdeeds of their independent franchise operators in California, an action that could have upended the business model on which the industry is based. The industry, meanwhile, has agreed to pull a referendum related to worker wages off the 2024 ballot.
I'm guessing because Newsom would like his name on the presidential ticket next year and he's in the process of backroom political negotiations "necessary" to shore up that support. The specific mention of union negotiations bolsters this conclusion.
This seems like a very shabby pitch to beleaguered American workers and encodes the sad expectation that people supporting a family of 4 should be doing so on a fast food job and now they can, temporarily, due to a wage hike in an election year.
Why is it that people working <less good jobs> shouldn’t have families? Why does half the country have such a firm belief that the bottom tier of society has no place procreating?
I don't believe that at all. I just don't believe that minimum wage "hacks" like this are the correct tools to solve the problem. I think policy energy would be much better spent dealing with the over monopolization of our economy and in creating new industries for these people to own and to be employed by.
Because our servants should be as cheap as possible and not distracted with their own families of course /s
Really though, we're on a website with mostly upper middle class people, many of whom rely on cheap labor to provide their affordable luxuries. If that labor was paid the same as most of us are paid we'd have fewer luxuries. This is clearly unpopular with many people. I think secretly many people wish their baristas and cooks weren't paid at all so they could eat out even more. In fact, not that long ago a terrible war was fought over that very desire, so clearly it's an opinion popular enough nearly half the country was willing to die for it.
So it's no surprise the idea lingers that some jobs deserve to be paid barely enough to cover the car and gas to get to the job. That big companies should be able to collude and prevent organized labor and suppress fair wages, while inflation eats away at the remainder. I mean, they're just standing in a hot greasy and dangerous kitchen all day next to a boiling vat of flammable oil. It's hardly worth the same pay as going to stand-ups and zoning out on the internet most of the day from the comfort of home.
Which looks really silly once significant negative population growth kicks in. With US well below replacement rate and net immigration rate down 58% since 1998 and continuing to trend down. So things may start getting interesting fairly soon.
Ultimately population scales the demand just as it scales the workforce, so it’s not inherently going to change anything outside of extreme situations. Significant negative population growth is however unpleasant because the infrastructure you build today ends up excessive in the future.
As to surplus labor you need flexibility simply from people changing jobs. Average 1 month searching every 4 years and that’s a 2.1% unemployment rate. Yes, many people keep their jobs for very long periods but other people job hop regularly.
Oddly looking at Japan etc you’re likely to see worse traffic as population declines not better. People end up abandoning areas and concentrating more so you get ghost towns and mega cities.
It becomes much more expensive per person to keep a small town water treatment plant running and roads cleared etc as population declines. So not only is useful infrastructure abandoned early, you now have people migrating into already densely populated areas.
"the collective subsidizing the very personal choice of procreating" I support massive subsidies because the sum of these personal choices is equivalent to the next generation's collective
Collective subsidizing how? Are you referring to food stamp and other government benefits? If so, I’d argue that jobs offering better wages should help with that issue.
> Undeterred, labor advocates worked with progressive lawmakers to gather enough votes to pass two more significant pieces of labor legislation. First, AB 102, which was signed into law in July, increased funding for California’s Industrial Welfare Commission (IWC), a long-dormant century-old wage board with the power to set wages, hours, and working conditions by industry. Second, AB 1228, which would have made franchisors jointly liable for labor violations — a long sought-after provision that was taken out of the final version of the FAST Act. According to reports, Governor Newsom led negotiations between industry groups and unions over the summer, and with AB 1228 set to pass this week — the final week of California’s legislative session — industry groups finally caved, agreeing to withdraw the referendum in exchange for a rewritten AB 1228.
> The new bill, which the legislature passed on Thursday, ditches joint franchisor liability entirely and officially repeals AB 257. (As part of the negotiations, legislators also agreed to defund the IWC.) But the bill largely keeps in place the Fast Food Council — with some important changes. First, the government representatives on the Council are reduced to nonvoting members, and the bill adds an independent member of the public who will serve as chairperson, presumably carrying a tiebreaking vote. The Council’s standards would apply to “limited-service” restaurants with over 60 establishments nationwide that share a common brand. But instead of promulgating standards with the force of law, the Council must now submit any standard to the Labor Commissioner, who, upon finding that it is consistent with the Council’s mandate, will then engage in a rulemaking process in accordance with California’s Administrative Procedure Act.
> The bill would set the hourly wage for fast-food workers at $20 effective on April 1, 2024, and the Council may set wages annually thereafter beginning in 2025
If they raised the minimum wage for all workers, it would have a greater destabilizing effect, so they limited it to a smaller group so they could get their message across while minimizing the change they cause.
> raised the minimum wage for all workers, it would have a greater destabilizing effect
Theory suggests this will happen at some point. Evidence shows we aren’t close to it.
Raising the minimum wage—across the board—to $25/hour in non-rural counties and something lower in rural (where COL is lower) would likely cause growth. Because while costs have gone up, there is a massive purchasing power unleashed. (Critically, this could only be done after zoning reform. Otherwise the surplus will just go to landowners.)
It just so happens that that particular tribe of people has sufficient political power to push through an increase for themselves.
See non English speaking farm workers that have their very own exclusions to minimum wage laws, even on the west coast. They just don’t happen to have the political power, so they get shafted.
Fracturing your opposition is a tried and true method to break consensus.
Edit: I find it hilarious that even in this tribal delineation, somehow people who work at a business that bakes things got screwed.
What a funny set of rules. The law has "an exception for restaurants that make and sell their own bread, like Panera Bread". Time for McDonalds to start making their own bread!
The other weird thing is that Taco Bell has to pay $20/hour, but a random taqueria only has to pay $15.50/hour.
Taco Bell vs taqueria does make sense, IMO. Smaller businesses have less economy of scale, and thus less ability to pay higher wages. Taco Bell, in contrast, has vastly larger scale, and thus the ability to pay workers more. Plus, it gives smaller, local businesses a potential leg up, fostering competition.
It doesn't give them a leg up in the labor market. They'll have to raise pay to compete, negating any leg up you're talking about, or if they don't, resentment from employees, high turnover, and either way many of them will go out of business. Big corporations win.
These laws are not made to be coherent or actually help people. They are made to curry favor with a particular base. It creates all these super strange situations where it's impossible to know what the rules will be. These nonsensical laws meant to target specific people and/or companies will be the norm going forward.
So weird. So now a non-fast food entry level job needs to compete with a $20/hr fast food job? It’d be interesting to hear what economists think about how this arbitrary incentive will influence workers.
The biggest losers will be teenagers trying to get their first job. Why would anyone hire that person when there will be adults with job experience applying for the same pay. People get triggered when you say these are jobs for kids, but some jobs do need to be for them so they can earn money in high school/college and have something on a resume to prove they showed up everyday.
Not to sound too grandiose, but I think that the tradition of teenagers working in low-skilled retail and service jobs is also important for societal cohesion. Nothing is going to give you more empathy for the people working in those jobs than having done it yourself for at least a couple years. For teenagers in the middle class and above I’d say it’s actually the most important reason to work those types of jobs.
>Nothing is going to give you more empathy for the people working in those jobs than having done it yourself for at least a couple years.
Have you worked in a restaurant or retail? No one gets more abuse than those workers.
The real reason we want teenagers in low-skilled jobs is to keep wages low. That's it. Not tradition, not social cohesion, not to teach anyone "responsibility" or "empathy" but simply to undercut the labor market, because if more adults worked those jobs, they would be paid more.
No, but That's just the way capitalism works. Wages are a cost that, like all costs, businesses are constantly driven to reduce in order to stay competitive and maximize profits. Hiring classes of people to whom society affords fewer rights and less social value (such as teenagers and immigrants) as a means of cutting costs through lower wages has been a mainstay of business since it was legal to send ten year olds to work in factories and mines a century ago. Tech does the same thing through free internships and visas, cutting costs by means of an exploitable legal underclass.
The fast food industry wouldn't exist if it was treated as serious work for adults. But it's considered pretend work for teenagers to learn to build character on or whatever, so it's fine that it barely pays a subsistence wage.
We don’t? I started working when I was 15 so I could buy a car when I turned 16. With a car, all kinds of opportunities open up. Like taking girls on dates, which, what do you, costs money. Luckily for me I had a source of income. Lord knows my parents couldn’t afford to just give me cash. I think about all the fun life experiences I would have missed out on along with the character building that comes along with doing a job well and earning a paycheck.
Fine, but it's not at all a typical or necessary part of life in most of the US. We do not need to be basing policy off of the "need" for teenagers to work when it affects tens of thousands of family's dinner tables.
Besides, what decade were you 15 in?
Finally, I don't think child labor is the answer to the forced isolation of car-dependent infrastructure.
Depending where you are in the world, yes.
You can get your full driver's license at 16.5 and various more restrictive ones before that here in Kansas (USA).
agree. that seems like an outdated concept by 50 years. i would rather have employees with experience take those jobs than teens who do their job poorly
I find it's the opposite, at least here in Canada.
In the past, fast food jobs were often done by young adults from the local area. They always spoke excellent English and/or French. They also tended to know at least some of the customers from outside of the job, too, from sports and other activities. In some cases, they'd be serving relatives and their own friends.
With them having also often gone to the establishment they were working at as customers while growing up, they were familiar with how customers were expected to be treated and what level of service was to be provided.
I didn't realize it at the time, but the service they offered was actually pretty good. They could take an order correctly, the ones in the back did a decent job of preparing the food, the restaurants were kept clean, and overall it wasn't a bad experience.
Two decades of rather awful immigration policies and other government-imposed economic distortions have changed all of that.
Now it's common to see foreign adults working such jobs. They often have a limited grasp of the local language(s), no ties to the community, and limited understanding of the level of service they should be providing.
Something as fundamental as placing an order in person is often far more difficult than it should be due to communication challenges, and mistakes are too common.
The quality of the food preparation has gone down. The cleanliness of the establishments has gone down. The prices, however, keep rising.
Overall, getting fast food is just not a good experience any longer. The automated kiosks and phone apps at least help avoid some of the ordering challenges that never existed before, but the rest of the experience can be quite bad.
I used to enjoy going to fast food restaurants and did it quite often, back when it was Canadian young adults doing the work at such establishments.
Now, though, it's such an abysmal experience that I rarely go. Whenever I do happen to, usually as a last resort, I'm typically left very disappointed.
How are they supposed to become adults with experience, if they can't get jobs as teens?
I worked a ton of jobs as a teenager, and started a few small businesses. I was highly motivated to prove myself against adults with the attitude you have, so I was working twice as hard and was making half the mistakes of my adult co-workers.
I learned so much working as a teenager, and it was a really enjoyable experience to feel useful, and to have my own disposable income. Without it, my mental health would have been much worse.
All of these comments saying that you worked a ton of jobs as a teenager and started small businesses: How many of you even realize how out of date your concept of being a teenager is like?
If a teenager is working it's in order to support their parents nowadays. They're not building any sort of higher experience flipping burgers or stocking shelves, they're tanking their education in order to survive.
It certainly as hell wasn't aligned with my teenage experience growing up poor. And more importantly think about how far a minimum wage part time job as a teenager is going to get you today vs 30 years ago relative to inflation.
> If a teenager is working it's in order to support their parents nowadays.
I went to high school 2008-2012. I got my first job at 15, and then two more jobs later on before graduating. I also had a small thing cleaning this retired couples house once a week and getting paid cash. I did not support my parents at all. The money was mine to keep or spend irresponsibly as I’d like.
> they're tanking their education in order to survive.
That’s not necessarily true. I worked in the summers only. I did have a bakery business with a friend selling our home made baked goods to our fellow classmates during the school year, but that did not take much of our time
Given how much tuition has surged, the era of paying for college with a crappy summer job is long over. Teens can make more money anyway doing social media, video game reviews, livestreams, and such. There are many more opportunities today to make money that didn't exist 30 year ago.
Why shouldn’t they be done by people with potential?
It seems to me the opposite. The world runs on a lot of shit jobs. Young people on some path to important leadership positions in society should with have real experience in these positions.
E.g: I learned a lot about efficiency and working with diverse and problematic people when I worked fast food as a teenager. I learned a lot about automation and prison when I worked in a factory in college. Both shaped a lot of my mental model for the world, and I think both contributed a lot to long term leadership skills.
The only shit high school job I don’t think I learned anything from was fruit picking. Other than maybe just how miserable it is.
This is the exact kind of sociopathic elitism that we should seek to minimize by promoting a diverse array of experiences for young developing adults, including working jobs that are “beneath” them.
Recently my son and I were at the mall and decided to grab dinner at a popular ramen spot. They had replaced the hostess with an iPad and a waitlist app. Ugh, I thought, but fine. I can type my name and the number 2 on an app just as easily as letting someone write it down.
Except it wasn't as easy. The iPad first demanded that I make an account with the waitlist app service. I could do it on their iPad but it encouraged me to download an app on my own device instead. There was no “no thank you, just get me a table please” option.
We noped out of there pretty quick and even avoided it the next visit to the mall. I don’t know what kind of money they’re saving by switching to this system, but they’ve definitely lost a $60/visit customer who would probably stop in 3-4x per year.
> The new minimum wage for fast food workers will apply to restaurants with at least 60 locations nationwide, with an exception for restaurants that make and sell their own bread, like Panera Bread.
The exception for small restaurants makes sense, but does anyone have any idea what the bread exception is all about? How many loaves a day does a restaurant have to make in order to qualify for the exemption?
I don't think this is the gotchya or insight porn you think it is.
For starters it's nonsensical.
Don't get me started with the jargon. "Economic revenue?" "Illegal?"
While I don't think you deserve to get downvoted for such nonsense, because maybe it is interesting for someone to explore the premise of what you're actually saying, even if you are saying it extremely poorly, I am at least trying to explain for you personally why a normal person will read this and think, "What is this guy talking about?"
It's simple: a business hires a worker when that worker generates more revenue than they cost.
So if I want to hire person A, but person A is only able to do work that would drive $18 in revenue for me, then I won't hire them at $20 because I will lose money.
If I were to hire them at $18 I would at least be neutral, and maybe I could work to get their skills up to the point where they are delivering more than $18, and I am now positive. Maybe they do well enough for me to increase their pay over time.
But I cannot do that with this new law. I'm banned from paying them $18. They simply will never work for me, or maybe anyone.
Good! Then the business should not exist if it cannot pay a living wage. Your comment makes it sound like you're doing this person a great service, when in actuality, such an arrangement is the problem. An employer paying minimum wage is saying, "I would pay you less if I could get away with it, but I legally cannot."
I would encourage you to work harder as a business owner to pay a living wage, if you so choose to be a business owner who requires labor.
> Why do you think the government should get to decide for how much I'm willing to sell my labor?
Because government's role is to protect its citizens. My apologies if this government is not suitable to you, you may have to relocate if a representative democratic outcome is not to your liking. The evidence is incredibly clear workers need protections from business and capital in the current socioeconomic system, but you may disagree depending on your mental model.
> Because government's role is to protect its citizens.
We have opposing views, and that's okay.
I believe a government should only provide public goods (nonrivalous and nonexcludable). I believe the primary purpose of a government is to protect private property and provide a system for resolving disputes.
I believe that welfare should be left to private sector charity. I believe that when the government does it, it is akin to using legal violence to force others to give to your causes, which then robs them of the funds they would rather give to other causes.
> I believe that when the government does it, it is akin to using legal violence to force others to give to your causes, which then robs them of the funds they would rather give to other causes.
What if the private property that the government is protecting was obtained (by ancestors) by “legal” violence to force others to give to your cause?
Was said property obtained under the current or a prior government?
If the current, then it is the duty of the government to resolve the dispute and restore the private property.
If it was a former, then there is nothing to be done. The jurisdiction was dissolved, unless the current government recognizes it (but then of course the jurisdiction would not be dissolved).
If we are talking about the USA, then it is obviously current government. Not that it would make much difference. The point is might makes right, whether it be political or physical.
So you believe it's OK for the government to use violence to maintain your control over your nebulously owned property, but not to ensure working citizens are not exploited?
So if you fall along the lines that taxation is theft, who do you expect to protect your property if you're not paying anyone to do so? And why should I pay taxes so that the government can protect your property?
> So you believe it's OK for the government to use violence to maintain your control over your nebulously owned property, but not to ensure working citizens are not exploited?
I'd happily allow the government to prevent the exploitation of its citizens, but I don't believe that voluntary transactions are exploitation. Why would I want the government to prohibit me from selling my labor at the price I choose?
> So if you fall along the lines that taxation is theft, who do you expect to protect your property if you're not paying anyone to do so? And why should I pay taxes so that the government can protect your property?
Taxation isn't theft when it is utilized to pay for public goods. It becomes akin to theft when my money is taken to be redistributed to folks in such a way I can't consume (non public good).
Currently I have to pay nearly $2k/year in county tax for other people's children to go to daycare. Why on earth am I paying for that? I pay $2k/month per child to send them to daycare and get $0 of the $2k I send to others back to spend on my own children. That is theft.
Your argument is that because a business is not yet distributing all it's revenue as costs, thereby driving its profits to $0, we should regulate that outcome?
What about the risk that the entrepreneur took in terms of their capital to open the franchise? Are they not due compensation?
Minimum wage requirements do several things:
- Make those who cannot deliver $x/hr in revenue permanently unemployed
- Drive up costs for consumers
Sure, those who keep their jobs are better off, but that doesn't offset the negatives imo.
Maybe the restaurants will eat the losses by not passing on costs to remain competitive, but we're already in a massive inflation cycle, so it wouldn't be hard for them to raise rates while blaming the law. But how many businesses needed to be driven to insolvency for your policy to determine minimum wage is at last sufficiently high?
No. My argument is that the cost of the workers where I live is at least worth $20 an hour. If you're not willing to pay them that then I don't really care about your business. It's not worth giving you a business license to operate for you're not willing to agree that the labor here is worth this much. The local government expects a certain amount of tax revenue from wages and since you're not willing to pay that cost of doing business you can go elsewhere. Someone else will be happy to take over the location. We don't need you.
> My argument is that the cost of the workers where I live is at least worth $20 an hour.
How far are you willing to quantify "where I live" geographically? Is it just CA? Should OR, AZ, NV all have the same policy? What about Mexico?
Why $20? Why not $22? Why not $1876436?
> The local government expects a certain amount of tax revenue from wages and since you're not willing to pay that cost of doing business you can go elsewhere.
The government could just as well increase sales tax? Why choose a policy that increases unemployment and drives out tax-paying inhabitants?
IMO using Chick-fil-A as an example is a bit like saying all software engineers at any company should be paid $500k/year because Google could totally afford it.
Lol, tell me you never operated a restaurant without telling me you've never operated a restaurant.
1. Labor is only ~a third of costs. [1]
2. A slow day at Chick-fil-a would average like 25 people per hour (more during meals, less in between), averaging $10 per person. So $2k per 8 hour shift.
I used to work at Chick-fil-a and saw the raw numbers in the back office one night. You're way under cutting it. Between 6 pm and 7 pm at the drive thru I worked at there would be at least 50 orders. Plus indoor counters would add another 100 orders to that count within just that hour. You really have no idea what you're talking about. They easily clear 30k on a good Saturday.
Don't confuse how long it took to bag your specific order with how many orders come in per period.
I lived in a wealthy suburb with only 1 of them so we had insane rushes. At times all 4 registers would have lines and the drive thru would be going out the parking lot. In that hour the rate of orders could go over 200 an hour and you're talking families of 4 or more.
They are supposed to get your order bagged in under 2 minutes (yellow) or 5 minutes (red). If something hits red it's because it's still in the fryer but it's not so bad cause it's the freshest when you get it.
> I lived in a wealthy suburb with only 1 of them so we had insane rushes
So you acknowledge your experience is just a special case?
This law covers all of California, not just your particular suburb. So unless you think that only wealthy people deserves fast food I don't see what point you are making.
> This law now makes it illegal for anyone that can only provide $19/hour of economic revenue from working at a fast food restaurant.
No, it doesn’t.
It makes it less likely that they would be employed to, but there is no law against employing people at an economic loss, and employers often do this (though they don’t tend to continue doing it when they realize that they are; but that’s their choice, not a legal mandate.)
The argument assumes (as naive economic arguments often do) perfect information on the part of all participants (particularly, that employers know both the maximum economic utility an employee will provide and the effect of wage on their productivity without error), which while a standard component of rational choice theory is also a component that is known not to match the real world at all, being wildly wrong for many purposes.
Good for them but inflation has already hit fast food hard enough that it no longer qualifies as cheap enough relative to other food options to be worth the lower quality.
One of my fantasies is becoming elected president and creating a constitutional amendment against minimum wage.
It is truly one of the most egregious and inhuman concoctions of modern collectivism.
No government or king should have that kind of power over its people. You are dictating by fiat that there not be any jobs below a certain price/threshold.
You are de-facto sentencing all the people below a certain IQ, skill, competence, age, experience etc to be permanently subjugated to government handouts or destitution.
You are eliminating the concept of teenage labor and apprenticeships (almost) entirely. Why would I hire an inexperienced guy for a job if I have to pay him the same as a normal guy.
Same goes for kids, why would I hire kids? This is used to be a crucial pillar of society. Not because the evil capitalist bakery could exploit kids or because they kids need the money. Its a crucial integration point.
The idea that you completely shield kids from society until after college is a crime against humanity.
Do you have any idea how important it is to be given responsibility, work hard and enjoy the fruits of your own labour at a very young age. Even I can't fully grasp the consequences of depriving this from our kids.
This is just the beginning what about low iq people? I mean people that have IQs so low that they can't even pass the military test. Something like 5% of the population falls in this category. Should the be deprived of what ever dignity they have left and live the remainder of the lives as a federal benefactor. Same goes for a huge chunk of disabled people..
There are so many other examples I haven't even though of yet and thats exactly the problem with you collectivists. You guys think you have it all figured out and you can easily restructure the millennia old experiment of civilisation itself from the top down.
I completely understand your point of view, but there is another way of looking at it.
Imagine a world with no minimum wage. Imagine you work all day in the fields picking fruit, backbreaking, in the hot sun. Imagine you get paid not much for this. Everything else still costs the same as it does now, you just don't get paid enough to have a car, or a house, or even make electricity bills each month. You get two jobs. Even three. You still barely make ends meet working 100 hours a week.
Is that a good life? Is that a life you want to live? Is that a life you want your kids, friends and neighbours to live?
Minimum wage is not about a government or king setting a bar that there not be any jobs below a certain price/threshold.
It is about a government (or king) setting a bar saying "for people live a decent life in this society, they must earn x dollars per hour. Paying them less than that is closer to slavery than a successful society, and we want to treat people humanely and give them a chance at a decent life with running water and hot showers."
(FWIW, Government (or king) needs to do this because otherwise employers would just pay the least they could possibly get away with so they can maximize profits)
If you're against a decent minimum wage, you're saying you're perfectly happy for your family, friends, kids & neighbours in your society to live in squalor and have a horrendously bad quality of life. Forever.
Honestly your respectful tone is refreshing. Based on my past experience with HN, I was bracing for a complete evisceration lol.
The issue I have is you're painting a distorted picture of reality that reads like a badly written fairytail with evil fatcats and poor Victim™ workers.
In reality, middle class America's purchasing power wasn't destroyed by the lack of a decent minimum wage or the greed of your local barbers, it was destroyed by inflation sponsored and accelerated by the one and only: Uncle Sam
Starting with the FDR era socialists policies that set the stage, we built an economy with embedded growth obligations (social security etc) addicted to credit and growth, like a junkie desperate for the next fix.
This credit-based system, with roots in Marxism, Keynesianism, and MMT, has become too big to fail. So we keep it afloat by handouts (methadone) and bailouts (sugar daddy), in a vicious cycle of robbing Peter to pay Paul.
The issue is we are not all Peter or Paul. There is this phenomenon called the Cantillon effect where those closest to the money printer get richer, while the rest of us foot the bill
This perpetuates a cycle where the middle class gets stripped of its purchasing power while simultaneously tangible goods like houses and commodities become even further out reach as those closest to the money printer and smart third parties race into real things.
This is where things go from ugly to end of Pax Americana. Instead of addressing the root issues, you and your kin want double down. More intervention (Federal Soylent™), more byzantine regulations and straight out persecution of the merchant class.
It sounds like hyperbole, I wish it was hyperbole but its not. "Eat the rich" isn't a parody, its the rallying cry of the ruling party. They are just about to ritualistically sacrifice the auto industry to moloch.
We live in the most prosperous nation in history. Poor people today live in luxury compared to most people just a century ago. However, things are taking a bad turn thanks to collectivism. That said, we are talking about a very small subset of the population.
Even among that cohort, its mostly crippling financial education/management problems. You have illegal aliens coming here with no wealth and no access to welfare who manage to not only survive but also send money back to their families.
we should strive to continually improve our bargain with nature but the ideas you and your kin share will bring about the end of modern civilisation as we know it.
> In reality, middle class America's purchasing power wasn't destroyed by the lack of a decent minimum wage or the greed of your local barbers, it was destroyed by inflation sponsored and accelerated by the one and only: Uncle Sam
OK, so what are you going to do about it? Increasing the minimum wage to keep up with inflation sounds like the perfect way to make sure people still earn relatively the same amount as they used to. Dozens of other countries do it, with no ill effects.
In fact, anyone that doesn't think minimum wage should keep pace with inflation is just saying they want to pay people less tomorrow than they do today, which is horrible.
Do you want your kids and family earning less in their life than you have in yours?
> Poor people today live in luxury compared to most people just a century ago
Poor people in the US today are vastly worse off than poor people in other developed countries. Tens of millions with no healthcare. Millions go bankrupt every year. Millions of kids with no access to food or housing. These problems are vastly bigger (even per capita) in the US than other developed countries.
> the ideas you and your kin share will bring about the end of modern civilisation as we know it.
I'm curious how you think increasing the minimum wage will "end civilization".
21 developed countries have a minimum wage higher than the US, and they seem to be doing great. High Minimum wage won't destroy civilization, it will just equal out society so that the mega rich will be less rich, and the mega poor will be less poor. It's been happening in other countries for many decades, learn from them. Use real-world examples rather than hyperbole predicting some kind of doom that is hypothetical.
Minimum wage is a small part of a larger set of collectivist policies that the west has been sleep walking into since WWII.
TLDR: All of those 21 countries are US protectorates or vassal states. Most of them are European countries that are slowly dying. Some are resource rich, some are tax havens, some are leeching of the goodwill/work of their ancestors.. None are making anything.
Long Version:
- Germany: US protectorate w/ 35K troops. Its truly a testament to the industriousness and ingenuity of these people that they still manage to make all those cars & heavy machinery despite the collectivism.
- Nordic Countries: Total population just over half the population of California with massive oil reserves and a lot of fish. a.k.a EAE with snow
- France/Spain/Portugal: Former empires, like an old person in pain waiting to die. They leech on the good will and work of their ancestors as their nations slowly die off.
- Switzerland, Luxembourg, Ireland etc: Tax/Banking Havens with niche talent.
- Rest Of EU: Dying countries propped up Germany & France or the equivalent of Europes China (Bulgaria/Ukraine/Poland).
- Canada/UK - US vassal states. Also happened to be the former world empire, same story as France/Spain/Portugal but to an even greater degree.
- Australia - Half of Californias population but has an entire continents worth of RAW minerals and commodities to export. Btw thats its, they don't make anything either.
Basically all innovation and production happens in the US or Asia. EU and the rest of the west are slowly dying protectorates/vassal states of the US (hence Pax Americana)
Conclusion:
Anyways most of thats irrelevant, the important part is the fact that they are all dying. They are all propped up by the euro-dollar system. ECB has no ammunition left. Spain, Italy, France are all looking down an imminent pension crises.
The UK is in slightly better shape but thats not saying much, they are looking down an impending sovereign debt crises but as a vassal state, they might get bailed out by the US.
In real terms, they use American medicine, American macbooks, American iphones, American search engines, American Social media, American steaming providers, American content, Asian washing machine, Asian microwave oven, American fast food, American candy, American Ice cream, American soda, American/Asian lightbulbs, Asian trains, Asian TVs, Asian cups etc etc
They don't make anything, they just exist on "good will" gained because of their ancestors and i mean in the literal sense. They exist on the bretton-woods system, all these currencies are artificially propped up. This system is just about to collapse btw lol.
You seem to be doing your utmost to go on tangents and make this a lot more complicated than it needs to be. I'm not sure why you won't answer the question.
Are you OK with you, your family, your friends, neighbours and the people in your community being paid less tomorrow than today?
Because that is what's happening right now in the US, and people are struggling because of it.
Because you're jesus smuggling extremely flawed assumptions through your question.
e.g. If you don't kill every 3rd cute puppy born, all the pandas in the world will face gruesome deaths. Do you want all the pandas in the world to die gruesomely @grecy?
If "being paid less tomorrow" is caused by inflation, wouldn't it make more sense to tackle the root causes of inflation?
Because its really odd that the only feasible solution you guys have on the table is to double down on Byzantine regulations and Federal Soylent™.
Idk maybe we should instead:
- Get rid of minimum wage
- Get rid of excessive OSHA, SEC, FDA, EPA, FTC rules etc
- Maybe we don't an extra 80,000 IRS agents.
- Since its not the cold war anymore, maybe we don't 18 different intelligence agencies
- Maybe we should replace all welfare and entitlements with an "essentials" program where "if your poor, you failed but we help you not starve or die of a treatable illness, however it comes with strings attached".
- Maybe we should look into how the military is extremely corrupt and inefficient. Why is the F-35 built so many different states, how did we run out munitions so quickly, why will it take that long to replenish it?
Also attacking me doesn't help your argument - it makes you look like you already know you don't have anything productive to add, so you just attack me instead of productively discussing the topic at hand.
> If "being paid less tomorrow" is caused by inflation, wouldn't it make more sense to tackle the root causes of inflation?
Are you suggesting the US should just have 0 inflation? White I'm not an expert, I believe economists consider inflation to be a good and healthy thing for an economy.
Also no country or economy in the world has ever had 0 inflation, so you're talking about doing something that has never been done before. Seems odd.
> Idk maybe we should instead:
- Get rid of minimum wage
- Get rid of excessive OSHA, SEC, FDA, EPA, FTC rules etc
- Maybe we don't an extra 80,000 IRS agents.
- Since its not the cold war anymore, maybe we don't 18 different intelligence agencies
- Maybe we should replace all welfare and entitlements with an "essentials" program where "if your poor, you failed but we help you not starve or die of a treatable illness, however it comes with strings attached".
- Maybe we should look into how the military is extremely corrupt and inefficient. Why is the F-35 built so many different states, how did we run out munitions so quickly, why will it take that long to replenish it?
Sure, you could attempt to do all those things. How long do you think that will take? How much push back?
Other countries don't need to invent "never been done" solutions and completely change their entire society to solve this, why does the US?
You could spend decades attempting to do all that, or you could raise the minimum wage.
It seems like you want to suggest solutions that are 500,000 times harder than a solution that actually works. Are you actually interested in fixing the problem, or are you interested in making everything much more complicated than it needs to be?
Wasn't my intention, I was trying explain how answering yes or no would be a tacid admission to the claims smuggled in your question. I don't even think its intentional.
> It seems like you want to suggest solutions that are 500,000 times harder
I agree but the alternative is even worse in my opinion. Yes it will work in the short term but check always comes due and it comes with a vengeance when you mess with reality.
This was the main messahe in all my previous posts. Re-organising society in such a way has massive unintended consequences.
Just like the human body, societies are very resilient but at some point it breaks and we are the breaking point. All it will take is a few more straws.
P.S.
> economists consider inflation to be good and healthy
I'm not an expert either but from what I understand, macro-economics is basically astrology for intellectuals but worse. There are different schools (keynesian, austrian, MMT, marxist etc) and the Keynesians won the roll of the dice. IMO very silly.
The entire premise is wrong. Both inflation and deflation are good or bad depending on the context. Its was never meant to wielded handful of people selected by a guy who won a popularity contest.
Idk if you've seen the world of warcraft movie (Warcraft), there is a type of magic in the movie called fell. Its offers a lot power at great cost. Thats artificial inflation/deflation (easing/tightening).
In the movie, you see the villain (Gul'dan) wielding fell by extracting the life force of people, thats exactly what happens when Jeremy (Fed chair) increases/decreases the rates or when a trillion dollars gets printed.
It will be exponentially easier to pass (even federally) than any prescriptions I've suggested.
That said, my point was the consequence of such a law would be much worse than doing nothing.
Long Version:
If we did nothing, inflation will effectively bring the current minimum wage down to zero given enough time.
Whereas if we set a federal minimum wage of $25/hr (current inflation adjusted), it will have disastrous downstream consequences.
I've touched on this in my OP. You are dictating by fiat that every human must have a minimum economic value of X.
You'll be de-facto robbing a huge chunk of the population of an honest life with dignity and prohibiting any types/classes of businesses that rely on unskilled/low value labor.
Also if you study history you realise its exactly these types of laws that create black markets and racketeering. Similar to lets say cannabis, you cant just wish the demand away..
It gets even worse, when you do this by industry like the California law. The state basically becomes the kingmaker. Its just a bunch of euphemisms for basically putting their thumb on the scale against large fast food chains.
> Whereas if we set a federal minimum wage of $25/hr (current inflation adjusted), it will have disastrous downstream consequences
You seem very certain of this.
You simply don't care that many other countries around the world have done it for decades with good outcomes?
For some unexplained reason, the US (which you yourself said is the richest country on earth) is different and the results will be disastrous in the US while they are not elsewhere?
I honestly think you're not seeing the big picture. If minimum wage goes up and gets pegged to inflation, low-income earners will simply take home a bigger portion of the enormous wealth that is created in the US. The richest class will take home less. That is precisely what happens in at least 20 other developed countries around the world, with excellent results. There are very few wildly rich people, and there are very few wildly poor people. Mostly everyone is in the middle.
The US could do exactly the same thing with exactly the same results, you just don't want to, because you're happy for a class of people to exist that barely survive to serve you.
I touched on this in one (or more lol) of my tangents.
Where is this good outcome you speak off? All these western nations are staring down a barrel with the exception of tax/banking havens and nations with a commodity to population asymmetry.
> If minimum gets pegged to inflation, low-income earners will simply take home a bigger portion
The entire economy runs on the margin. Traders get to experience this visually with the orderbook where you have bids/asks and the resulting liquidity/depth.
When you have a minimum wage pegged to an inflation "adjusted" rate, you're opening a Pandora's box of positive feedback loops resulting in the creative destruction of the economy.
This is not just a prediction, its exactly happened to these "20 other countries" including the US (to an extend). These countries use to be industrial powerhouses that accumulated immense wealth during their imperial past, look at them now.
P.S.
Just read your last two paragraphs, don't you see how it reads like a bedtime story?
Energy cannot be created not destroyed. When you dictate every human must have a minimum economic value of X, what do you think happens to the denominator X is measured in?
What do you think happens to an entire subset of low margin businesses that rely on unskilled labour.
What do you think happens to the banks and businesses that invested, loaned or leased land to those low margin businesses.
What do you think happens the streets/towns/cities those businesses to used to exist in?
Moreover, what do you think happens to your country when your adversaries or other countries start eating your lunch.
Again not a guess or prediction, this is whats been happening of more than half a century now and you want to deal with the consequences by doubling down.
> One of my fantasies is becoming elected president and creating a constitutional amendment against minimum wage.
The president really doesn't have anything to do with the constitutional amendment process. It's a legislative process, so congress and senate; plus the legislatures of the states.
This is like when someone wants to be mayor to fix the schools. In most places I'm aware of, schools are governed by school districts and school districts are supervised by the state department of education and the county board or supervisors for the counties they operate in, and city government has nothing to do with their operation, but still mayors want to fix schools.
Anyway, federal minimum wage is much lower than minimum wages in states with their own rules. If it makes life dramatically better to not have one, companies and people would flock to states without. If it makes things dramatically better to have one, companies and people would flock to states with one. Seems like it's not a major driver of life being better or worse.
Sure, the president proposes things for legislature to adopt so he (or she) can sign.
Amendments don't touch the President's desk, and the Senate and House get mad when the President meddles in things that are for them alone. If the dream is to pass an ammendment, it might be more effective to form a single issue party, like the Prohibition Party and raise the issue that way. Prohibition passed, but their presidential candidates never had a chance of election.
> One of my fantasies is becoming elected president and creating a constitutional amendment against minimum wage.
The President is the single weakest elected official at the federal level (and weaker than many at the state level) in terms of a Constitutional amendment, having no role at all in proposing or ratifying them, so its a silly fantasy for reasons beyond the viability of such an amendment itself.
For some reason there's people who legitimately think that minimum wage is destroying their freedom when in reality they are some 50 year old dude who wants to see if a 15 year old will take their low ball offer... the same hourly wage they were paid 35 years ago.
I live in a very wealthy suburb of LA where minimum wage is already $14.50 and my local In-n-out pays $19. Everyone at the fast food spots near me is clearly in high school or college. Clearly they "generate economic output". Gimme a break. Pretty sure the kid at the local Sprouts is like 17.
A large cheese pizza near me is $24. If someone can't buy a pizza after working for you for two hours then you have no right to be speaking about "economic value".
Lets say I have a software development agency focusing on scaling sophisticated platforms.
There are plenty of rote repetitive stuff thats not critical in nature. So it would make sense to hire a guy/gal who just got out a bootcamp. They basically get paid to learn & polish their resume while you get low value stuff done with the added benefit of potential valuable team member in the making.
Now imagine if California passed a law saying all software development jobs must be payed $50/hr.
Mind you this was already a barely an acceptable trade for agency with a lot going on these employees sticking with the agency after they gained some experience.
I believe in a very simple fact, which is that minimum wage has remained stagnant in comparison to inflation. That means the purchasing power of someone that made minimum wage 30 years ago has sharply gone down.
This dude is externalizing the costs of training the american workforce which is done with taxes. He claims a young person is untrained when in reality by 16 years old a person in the United States is better educated and trained in all sorts of skills than the vast majority of the human race on the entire globe. This person then wants to claim that such a person has "low economic output". I could break down every single thing in his comment point by point by I really don't have time to write a book for you. Suffice to say he's just plain wrong. Morally and in basic factual assumptions about how the economy works.
> training the american workforce which is done with taxes
Thats the entire point/undertone of my post. We have replaced crucially important aspects of society like integrating kids (Rites of Passage), apprenticeships, taking care of the elderly with federal soylent.
> 16 years old a person in the United States is better educated and trained in all sorts of skills
You cannot replace hard work, communication, conflicts, expectations, real time problem solving, handling pressure, social minutia etc with algebra and slicing a frog apart.
> claim that such a person has "low economic output"
I've never said that. My point was about people who got dealt a bad hand in life. Whether if its IQ, disability, upbringing etc. Society used to have a place for these people now its Federal Soylent™
As I'm writing this from the UK I'm not sure I see the "worked out pretty well", especially considering the bakery below me who had to let go off my cousin and the town centre which looks nothing like my youth when it was filled with big stores.
Btw, we British at least try to maintain the appearance of sensibility & wisdom so there is a quasi attempt to address my concerns from the OP with a different minimum wage for those under 18 and a government push for apprenticeships/trades.
That said, it still temporary band aids that doesn't do much of anything. Its also worth noting, the highest minimum wage here is just about $15 and thats in London.
Can anyone point me to any broad research or economic analysis that shows that minimum wage laws do anything to help those with low skill in the labor market? The economic consensus and data evidence I find is that it basically does nothing in the medium term, because the market just inflated to adjust, and pushes people out of the workforce or into the black market at the margins.
I’m liberal enough to be open to the idea, but it seems like the least likely of left wing economic policies to actually improve the quality of life of low skill workers.
